Blood-curdling stories, tricks and treats are all part of Halloween fun. But the last thing we expect are spooky tales from our friendly lenders, bankers, and credit card companies.
PAYDAY LOANS. You’re broke but payday is still two weeks away. You request to borrow $100 from the Payday Loan Company. They make you write a personal check to them for $115. The loan shark makes you sign a contract with all kinds of find print and agrees to hold the check until your next payday. In two weeks the shark deposits the check or you can get your check handed back to your VOID stamped on it by paying $115 in cash. But you’re as broke now as you were then, so for only an additional $15 cash you can extend the loan for another two weeks. In other words, the cost of the initial loan is a $15 finance charge—or 391 percent APR! Then you have to pay another $15 to start over. Soon you owe more than you borrowed in the first place. Payday loan companies are in the business of bleeding people for as much money as possible and then forcing them into bankruptcy. Now that’s freaky.